from the you-can't-make-this-stuff-up dept

If you thought France had already gone off the deep end with its plan to kick file sharers off the internet, now comes the news of a government report that suggests a new plan: tax successful big internet companies, like Google, Yahoo and Microsoft and use that money to fund the "music and publishing" sectors (which basically means the record labels). We've been pointing out how all of these attempts to bolster copyright laws have really been about propping up businesses that haven't been able to adapt, but is there any more blatant example of this than taxing the companies that have figured out how to use the internet to fund those that haven't?? This is entitlement culture in the extreme.

Apparently Nicolas Sarkozy will get "the last word" on whether or not to adopt this policy, which means that it's pretty likely. Sarkozy -- who has a long history of copyright infringement by his own party -- seems to believe that stronger copyright means defending French culture, when it really just means handouts to a few failing businesses who haven't wanted to adapt.

The Zelnick Report says the tax would kick in anytime an online ad or sponsored link is clicked in France. One of the most controversial items in the report is that it calls for a company to be taxed regardless of where it is based.

If that's legal, it's rather frightening. Nearly any website with ads could be taxed if visited by the French. Just wait for sites to start setting up IP filtering that blocks all French users.

Where the company's based

You should have mentioned this tidbit:

The Zelnick Report says the tax would kick in anytime an online ad or sponsored link is clicked in France. One of the most controversial items in the report is that it calls for a company to be taxed regardless of where it is based.

If that's legal, it's rather frightening. Nearly any website with ads could be taxed if visited by the French. Just wait for sites to start setting up IP filtering that blocks all French users.

We've been pointing out how all of these attempts to bolster copyright laws have really been about propping up businesses that haven't been able to adapt, but is there any more blatant example of this than taxing the companies that have figured out how to use the internet to fund those that haven't??

I think the bolded statement is incorrect. The businesses in question (namely the record companies) actually have been able to adapt; however, they have been unwilling to do so. Just about any business can adapt to any situation or any market, it's a matter of whether the executives and the major shareholders are willing to allow it to do so.

and the french govt can can hire people

When copyright holders are faced with competition, they merely have their government granted monopolies extended to eliminate the competition.

I wrote about how when player piano rolls were determined to be perfectly legal and not copyright infringment, the copyright industry simply had Congress extend its monopoly to include player piano rolls. That was easier than competing.

Now France is arbitrarily extending government granted monopolies to include revenue which has no relationship or basis to copyright. To me that's criminal.

Encourgment of encryption and proxies

Sometimes I think you take things a little too literally, as in block all french IPs.

Instead what I think you will find is that the 'people' in france will want to see some adds. (For all the add blockers out there, there are plunty of people that then go out looking for product from places like amazon.) Alls that will happen is if they can't take a frech IP, the french will just start to encrypt all traffic to and from their computer and use proxies to do all their internet traffic.

So the french will still head to google.com... over an encrypted link that shunts to a proxy outside france.

Optimism

Perhaps this will get some sort of reasonable and well thought out (and well promoted/funded) response by Google or Microsoft about how silly this plan is? And perhaps that reasonable and well thought out response will draw light to these sorts of laws/problems in general?

I mean it shouldn't even take an alliance of these companies to fight this, it is the French we're talking about right?

Re: Where the company's based

I agree with your point, but doesn't the report advocate charging the ad networks, rather than the sites hosting them (presumably because they're easier targets)? (Haven't read the original as my French isn't up to much.)

If this does come to pass and I were a big cheese at Google, I'd get together with my fellow rounds of Roquefort at Yahoo and Microsoft and block France for a day. See who blinks first.

Funding for record lables

Everyone hates new taxes.....however, raising capital in this market truly is not happening. I am currently raising capital for a new record lable. With over twenty years experience in finance, most, if not all markets, welcome agressive measures to loosen up the investment markets.

Funding for record lables

Everyone hates new taxes.....however, raising capital in this market truly is not happening. I am currently raising capital for a new record lable. With over twenty years experience in finance, most, if not all industries, welcome agressive measures to loosen up the investment markets.

Re: Funding for record lables

That's just an absurd statement. You don't raise capital by implementing a tax. You raise capital by finding investors willing to fund your venture. If you aren't able to find investors, either you're not good at presenting your business plan, or you have a bad business plan. In either case, to take tax payers money for your record lable is just wasting tax payers money since investors had the good sense to not give you money directly.

Taxes don't make an investment market. Investments do. Creating a tax on one market to give to another isn't an "agressive measure." It's socialism.

I find it hard to believe you have "over twenty years experience in finance" yet are completely ignorant on basic economics. Is your financial experience comprised of mismanaging a hedge fund? Do you work at AIG?

kind of typical

It worries me that I am so rarely surprised by the stupid ideas coming out of some governments.

France in particular has a long history of cutting off its nose to spite its face. They were terribly snobbish about the French language and created the Academy Francais to protect it and its place in French culture. They insisted on set rules, grammar etc. This made the language somewhat limited as it could not adapt and failure to adapt meant it was left behind.

English by contrast stole words from everywhere which helped in its spread around the world. Which is why English has been the lingua franca for quite a while now ;-)

At the end of the day France isn't that big a market and the precedent set if they get away with this would be enormously damaging. I hope the big Tech companies band together and block the whole silly country and see how long before the screams of rage erupt from the French people.

Of course France would probably go running to the EU and force them to fine anyone who did this.

Re:

Who Cares

Who cares what France does? Let them try and tax companies from other countries and see what happens. A whole lot of nothing I suspect. They're only hurting themselves to subsidize a dying industry segment. C'est la vie.

Re: Re: Where the company's based

Depends on the site -- if the majority of my advertising is targeted at Americans, it make sense to filter out the handful of French users who visit my site just to avoid the hassle of having to hire a French accountant to figure out how much of that tiny piece of revenue I owe the government.

Re: Re: Where the company's based

It's actually pretty easy to filter out French IP addresses. Granted, if a French user really wanted to access an external website, it'd be easy enough to use a proxy, but for accounting purposes, anonymous users being routed through Switzerland don't count as French.

Re: Re: Re: Where the company's based

You seem to be making the mistake that many non-technical people make of thinking that IP addresses correspond to unique users. Addresses are not users.

Granted, if a French user really wanted to access an external website, it'd be easy enough to use a proxy, but for accounting purposes, anonymous users being routed through Switzerland don't count as French.

Only if you use fictional "accounting". And if you're going to use fiction then anything's possible, isn't it?

cme and force me to pay taxes YOU FUCKTARD

i feel like tellign every frenchmen to visit a site with my add on it and not sell a damn product or nothing and hten have this idiot try and tell me i have to pay taxes

ya its illegal its called money laundering in Canada
and effectively he will force the isps in Canada to BAN ALL FRENCH ISPS

hey fucktard part 2
remember that berlin wall.....
i would say to the french people against this start playing PINK FLOYD

tear down the wall.
tear down the wall.
CANT wait for the french prez to tell businesses in Canada they owe him taxes HAHA what a fuckin complete wanknut
this has got to be the most insane stupid backwards OMG STUPID MAN whose ever been allowed to run a a country
period

Re: Where the company's based

If I were an American, running a web site in America, with no other connection to France other than the internet being accessible in France, and I got a tax bill in the mail from France, I'd give it all the consideration it deserves: I'd chuckle and throw it in the trash.

Let them come after me for the money if they think they can.

I don't suddenly becomes subject to taxation in 160+ countries just because I put up a web site on the net.

listen people iuts really easy to ban france

you can even do it locally on your own computer then they cant even come to it

hosts files ?
and you know those class B and class C ranges and all those lovely ovh server seedboxes from France POOF and there goes a TON more money then the ads would ever make YUP this is gonna be grand , i am beginning to think maybe the twit doesn't realize the damage hes doing and on our front he in the end will expedite the destruction of french culture

Re: Re: Where the company's based

"Let them come after me for the money if they think they can."

The best I remember, the US and France have a criminal extradition treaty between themselves. And I seem to also remember the FBI talking about working with other countries to clamp down on international financial crime. Criminal tax evasion would seem to fit that bill on both counts.

"I don't suddenly becomes subject to taxation in 160+ countries just because I put up a web site on the net."

You aren't immune from the law just because you break it "on the net". Do you really expect the US to become a haven and shelter for international tax cheats? Isn't that what the US accuses some other countries of?

Re: Re: Re: Re: Re: Re: Where the company's based

Actually...you don't seem to have any idea what you're talking about. When the OP said "French users", he actually meant "French IPs". Or did you think sites were going to block individual users throughout the world based on their French accent?

crazzzzzyyy

Re: Re: Re: Re: Re: Re: Re: Where the company's based

Actually...you don't seem to have any idea what you're talking about. When the OP said "French users", he actually meant "French IPs".

Actually...you don't seem to have any idea what you're talking about. He distinctly wrote "users". And IP addresses are not beings bound by law in any sense of the word so that interpretation wouldn't make any sense either. What are you smoking?

Or did you think sites were going to block individual users throughout the world based on their French accent?

I meant what I wrote, that he thought that IP addresses correspond to individuals. You seem to unable to read, severely confused or trolling.

Re: Hmm...

Re: Re: Re: Where the company's based

> The best I remember, the US and France have a criminal
> extradition treaty between themselves.

Like I said, let them come after me if they think they can. I'm not subject to French law just because I have a site up on the internet.

As a federal agent myself, I find the idea that the US is going to start shipping its citizens to France by the thousands for not paying some trumped-up tax laughable.

What a money-maker that would be for any country that finds itself in a financial crisis and in need of some dough. Maybe Nigeria is hurting financially, so they just tax everyone in the world $250,000 for every web site that's accessible in Nigeria.

Would *you* pay that? Would you even seriously consider it? Of course not. And neither will the US government tell its citizens, "you better pay up to Nigeria or we'll ship you over there for trial."

> You aren't immune from the law just because you break it "on the net".

But I'm not breaking any law. You don't seem to understand that FRANCE HAS NO JURISDICTION OVER ME. I'm not a French citizen, nor am I in France. That doesn't change just because I put up a web site. They don't get to suddenly impose taxes on the entire world any more than the US can pass a law against internet gambling and start arresting people worldwide for not obeying it. The people in Belize are not subject to US jurisdiction and can gamble on the internet as much as they want to.

Talk about taxation without representation... we fought a war over that once upon a time.

Businesseshome

I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

Re: Re: Re: Re: Where the company's based

As a federal agent myself,...
blah blah blah...
You don't seem to understand that FRANCE HAS NO JURISDICTION OVER ME. I'm not a French citizen, nor am I in France.

Uh huh, like you guys wouldn't expect the US to have any jurisdiction over, say, a British citizen who has never been to the US or for Britain to extradite him to the US either, would you? I suppose that would be "laughable" too, wouldn't it? Or are you saying that those things can only happen to citizens of other countries because US citizens are "special"? Well, you know what they say: what goes around comes around. I can well imagine other countries wanting the US to extradite people for internet crimes as well now.

Complétement idiot

My only comment about this tax:
Encore une idée complètement idiote de notre minable président Sarkozy ! Ridicule ! Stupide ! J'ai honte !
I would say personaly that our leaders, "intellectual" simply don't undertand what is internet, its philosophy.
They simply see that has 2.0 version of "Le Minitel"
There are excellent conferences of Benjamin Bayarthttp://www.fdn.fr/minitel.avi
In French... Sorry

Re: Re: Re: Re: Re: Where the company's based

> like you guys wouldn't expect the US to have any jurisdiction
> over, say, a British citizen who has never been to the US or for
> Britain to extradite him to the US either, would you?

I didn't agree with that, either. I think it's a shame the British government doesn't have more respect for its own citizens than to buckle to pressure from some other country. They should have told the US to go pound sand.

That being said, I don't see the US similarly buckling to other countries any time soon.

> Or are you saying that those things can only happen to citizens
> of other countries because US citizens are "special"?

No, not because US citizens are special, but because other countries find it politically expedient to please the US at the expense of their own citizens.

> I can well imagine other countries wanting the US to extradite
> people for internet crimes as well now.

They can expect all they want. Whether it will actually happen is another question entirely, especially when those "crimes" are only crimes in the foreign jurisdiction. For example, it's a crime in Germany to glorify or display Nazi symbols, but it's protected speech in America. Good luck to Germany getting an American extradited to stand trial for putting up a web site full of swastikas. American citizens don't lose their 1st Amendment free speech rights merely because they choose the internet as their medium of expression.

Re: Re: Re: Re: Re: Re: Re: Re: Where the company's based

"I meant what I wrote, that he thought that IP addresses correspond to individuals. You seem to unable to read, severely confused or trolling."

He said ban all French users. The ISP's are allocated IP address ranges so to ban all users in France, all you would have to do is block those IP ranges. and Tada, every "User" of the website on a French ISP cant access the site.

Re: Re: Re: Re: Re: Re: Where the company's based

You don't have to go there, either. Stay home if it bothers you so much.

Still, it's taxation without representation, isn't it? You sound like a British gov't agent / loyalist telling an off an American colonist (don't go there if it bothers you so much). And I can well imagine a colonist telling the agent / loyalist what I'm about to tell you: FU!

Re: Re: Re: Re: Re: Re: Re: Re: Re: Where the company's based

It seems you don't really know what you are talking about..

Heh, it's really funny watching the technically ignorant, such as yourself, pretend to be otherwise.

He said ban all French users. The ISP's are allocated IP address ranges so to ban all users in France, all you would have to do is block those IP ranges. and Tada, every "User" of the website on a French ISP cant access the site.

OK genius, in my case I can connect to a website from an IP address in any one of several countries of my choosing. So just what nationality does that make me?

Re: Re: Re: Re: Re: Re: Re: Where the company's based

No, because you have a choice not to patronize that state. The taxes are in place and known to you before you travel there and if you choose to do so anyway, that's on you.

Your analogy to the British colonies fails because those people weren't just visiting-- that's where they lived-- and the taxes were being imposed on them after the fact by royal decree. Every few months new taxes were coming down the pike.

And as a practical matter, your approach could not work in any reasonable way, as it would require citizens to carry around proof of residency everywhere they go and that still wouldn't address people who move from one state to another. According to you, if I move from Texas to California, I should be exempt from all California taxes-- sales, property, income, etc.-- from the time I arrive until the whenever the next election occurs, because I had no say in electing the people who were in office when I arrived.

It's ridiculous on its face, but if it makes you feel better to think of yourself as the modern-day equivalent of an aggrieved revolutionary patriot because Montana makes you pay an extra five cents for a soda as you drive through on vacation... well, whatever gets you through the night, chief.

Re: Re: Re: Re: Re: Re: Re: Re: Where the company's based

Yeah, kind of like the colonists had a choice not to go to the colonies either, huh?

your approach could not work in any reasonable way,

You're starting to sound a lot like TAM defending SOCAN, ASCAP, et al. Gee, it's just too hard to figure out who should pay and who shouldn't, so just make everyone pay! Yeah, that's the ticket!

According to you, if I move from Texas to California, I should be exempt from all California taxes-- sales, property, income, etc.-- from the time I arrive until the whenever the next election occurs, because I had no say in electing the people who were in office when I arrived.

Strange, I've re-read what I wrote several times and I can't see where I wrote that. Maybe you have a virus on your computer corrupting the display. Or maybe you're making stuff up. Eligibility to vote is what counts, regardless if you exercised it or your chosen representative won.

It's ridiculous on its face,...

So said the King's tax man.

...but if it makes you feel better to think of yourself as the modern-day equivalent of an aggrieved revolutionary patriot because Montana makes you pay an extra five cents for a soda...